Ballmer on Linux, licensing and .Net - part two

How about the theory that Linux will enter companies through the back door, if you will, because consumers will install it at home, and then want it at work?
Linux is not coming to companies on the desktop, not in any significant way. I don't think that's really happening. On the server, I might agree with you. People are going through the IT department. Where it's coming in is through the IT staff. People will look at it. They read about it in the paper. And the IT guy asks, 'Do you believe what they say, or do you believe the Microsoft guy?' Which is the better value proposition for us?

You said Microsoft is doing a "full relook" at end-user licensing agreements. Can you explain what you mean by that?
Our end-user licence agreements, many customers tell us, are too complicated. If you get a Windows terminal server licence agreement today, it's harder to understand than we wish it would be. So we're trying to simplify. But we're only going to simplify if it is a real win for the customer. We're only going to do it if we can make it beautiful from the customer perspective. We've learned.

Part of this value proposition is partly about Linux. If you have Windows 95 or Windows 98, we want to get you onto Office XP and Windows XP. Some people wait for the first service pack, and now we have that. In times where budgets are tight, I think one of the best value propositions that we can put on the table is the desktop migration from Windows 95 and 98 to Windows and Office XP.

There have been reports that Microsoft is considering new licensing for small and medium-sized businesses. Can you explain?
We're looking at it. We don't have all of our licensing options available for small and medium-sized businesses today. Our enterprise agreement is not available for them. That lets customers pay in three chunks. So we are going to do some things to let (small and medium-sized businesses) pay in three chunks.

Are small and medium-sized businesses becoming much more important to Microsoft?
They have always been important. There are some people outside of Microsoft now realising how important they are. It's the biggest part of the market. The biggest part of the market is not the enterprise or the consumer market. It's small and medium-sized businesses.

What comes next in web services?
.Net Server. That's where we get the .Net framework integrated with Windows. We need to have .Net extensibility within Office, that's an important step. We need to have .Net extensibility and programmability in the database - that's a pretty important step. We need to have better end-user support for XML data. Xdocs is just part of that. We need to do that throughout the Office suite. We need to have additional operating system services to help manage XML data. That's farther in the future, the next major client release of Windows, whenever that comes.

As an industry, there is more work to be done on the underlying protocols that move and secure XML transactions between applications. Then there is technology that needs to ship in the operating system and the programming model to support that. Those are the top things that will happen in the next three months to three years.

What about consumer web services? What happens now that .Net My Services has been changed?
The one thing we learned is that it's not about one big service in the clouds. It's about servers, so that people can create their own services. It's about making sure that the client system can create those services, so my PC can access my services. You should expect that to synch up with the next major Windows release, called Longhorn. I'm sure we will have some service packs in between.

Mike Ricciuti writes for News.com